Well, okay, welcome to the final lecture. It's about finding purpose. This is aimed not just at people who are going into finance, but actually at anybody. Because we are increasingly living in a world of financial capitalism where things are run along modern financial principles. And you can't escape it. You could become a hermit and move to a cabin. I thought if that will work though. Pretty tough because it will turn out to be somebody's property or government lands. And you can't do it. So ultimately you're going to get a paycheck, and it's going to come out of some financial account. And so, it may seem un-motivating or something, this system. So I wanted to talk about that. So I'm going to start this with critics of modern finance. So, Adair Turner, is not a businessman. As far as I know, he was teaching at the London School of Economics, then he was head of the Financial Services Authority, FSA in the UK that used to be the main regulator. And now, he's Chairman of something called the Institute for New Economic Thinking. I see him at the World Economic Forum. He's a prominent voice there. So he is lamenting certain trends that seem obvious and important to him. One of them is the rise in debt for advanced economies. We're talking about much of the world here. So total debt of domestic credit as a percentage of GDP was a little over 40% in 1950, and now it's up to 160%. So that means everything is leveraged, maybe that's over simplifying it, but why this big trend? And then secondly, this is the share of the financial industry, that's profits, and wages and salaries in finance. And I hear he's going back to 1850. It was only 1%, this is just for the US here, 1% of US GDP. And it's grown to something like 7%. And he's asking whether that makes sense. How much of that is contributing to a better society and how much of that is just rent-seeking? Rent seeking is a term coined by Anne Krueger, an economist, referring to just grabbing what I can get rather than creating anything. A lot of finance does seem to be, when you're trading securities back and forth, it sounds like it's a game, or selfish, it's not contributing. Again, it's a similar theme, To that of Adair Turner. She starts her book about by talking about Steve Jobs, who's a hero, he's a good guy to talk about. He's many people hero. Making Apple computer, at one point the most successful company in the world. After he died, it's been five years now since he died, Apple began borrowing billions of dollars. Why did they do that? Well apparently they have lots of money, under Steve Jobs they accumulated a huge amount of money, why do they do it? Well, it's to avoid taxes, she says. They have the money, but they don't want to spend it, because they'd have to repatriate it. They have it stashed away in foreign tax havens. And maybe they'd have to pay capital gains taxes on their assets, so they don't want to do that. And so that's why they're borrowing money. She kind of links that to loss of creativity. The business world doesn't always reward the most mathematical sane person. Steve Jobs was somehow brilliant but also a little bit off. In fact, his early death has something to do with his rejecting medical treatment for his cancer and instead wanting to rely on some kind of health, I don't know the details. He was quirky, so he didn't want to go after tax breaks either. Why not? You can say it's perfectly logical. He somehow knew what to go after though, ultimately. So while she makes a similar complaint to Adair Turner that the world seems to be increasingly run by takers, as she calls it, rather than makers. So is that a fair criticism of finance? Again, I don't think either of these people are criticizing finance. They're criticizing trends within finance.
